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Pitney Bowes Finds DRTV works for business-to-business marketing

Pitney Bowes Inc., Stamford, CT, began airing a new flight of DRTV spots
this month as part of its ongoing campaign to reach the small office
and home office (SOHO) markets that are difficult to reach through
direct mail.

It may seem ironic that the largest maker of postage meters in the
United States would choose DRTV as a marketing medium, but the company
found a dearth of reliable lists of the estimated 10 million small
offices and 40 million home offices in this country.

"There are no lists available of home offices, really, if you want to
mail or tele-market," said Beth Ghiloni, SOHO marketing manager. "We
were forced to go to other new channels of distribution and creating
awareness. Direct response TV has been the most successful of our new
ventures."

Its spots for the Personal Postage Meter feature actor John
Ratzenberger, a star of the syndicated series "Cheers". He demonstrates
how the device can save the time of travelling to the post office to buy
stamps. When hooked to a phone line, the meter automatically dials in
to a Pitney Bowes computerised centre that fills orders for more
postage.

The company is offering a two-month free trial of the meter, a "business
building" CD-ROM and $25 of free postage. After the initial trial, the
meter costs $24.75 a month to lease.

Pitney Bowes is targeting a market of smaller offices that each spends
between $7,000 and $ 10,000 a year on office equipment and technology,
according to a study by IDC/link, a market research firm. Those spending
levels are expected to grow between 7 percent and 8 percent a year.
Ghiloni said she estimates that 8.5 million of the 10 million small
offices in this country do not have a postage meter.

The DRTV spots were produced by Milton Samuels Advertising Agency Inc.,
New York. Media Direct Partners, a media buying subsidiary of
Interpublic Group, also based in New York, is handling the media
placement.

Pitney Bowes has hired several telemarketing companies as it tests and
refines the campaign. It originally chose West Teleservices Corp. to
take orders and direct complex product questions to a company call
centre, but it also hired MBS Communications Inc., Chesire, MA, to
provide callers with a more thorough sales presentation.

"It's a boutique company, but the conversion rates are much higher,"
Ghiloni said. "We switched a lot over to them." Pitney Bowes currently
does not offer an up-sell in its DRTV campaign, but Ghiloni said that
the company plans to test such an offer this year.

Business-to-Business expertise hard to find
While Pitney Bowes had difficulty finding lists for the SOHO market, it
also had a difficult time finding a DRTV agency that had experience in
business-to-business marketing.

"We're not selling a consumer product, but what were the examples we
could look at out there?" Ghiloni said. "We started out and we didn't
know a thing. We didn't know about media buying, we didn't know about
the telemarketing end of direct response TV, we didn't know about the
creative. We have spent the last 6 months testing dramatically and have
learned a lot."

One surprising finding was that business-related TV shows did not draw
as responsive an audience as educational and artistic programming.

"We thought that a CNBC or business-to-business show would give us the
best draw," Ghiloni said, referring to the business news cable channel.
"It turned out that channels that are more focused on culture and the
arts - History Channel, Discovery, A&E - are where we get the
biggest bang for our buck."

The company also learned that, contrary to what its media buying agency
had observed in previous DRTV campaigns, cable channels outperformed
broadcast spots by a factor of 10. "The cost of cable is a lot cheaper,"
Ghiloni said. "Now we're experimenting with different kinds of buying
formats within cable." It plans to buy more pre-imputable spots that are
discounted for direct response advertisers.

Although the company is targeting businesses, it recognises that many businesspeople do not know how postage meters function.

"I think our DRTV commercial is very successful creatively because it
shows what the product does," Ghiloni said. "Nobody knows what a postage
meter is, really, but the commercial explains it in sort of a humorous
way that makes you feel like a postage meter is for you, as opposed to
some big, big company."

The campaign is intended not only to raise awareness, but also to
capture names and addresses of home businesses for outbound
telemarketing follow-up and direct mall.

The days of mass advertising and scattergun TV campaigns are over, according to the worlds leading marketer, Philip Kotler, who says that companies should shift to target and one-to-one marketing in light of increasingly fragmented media channels.

What lies ahead for us in marketing direct? The Americas and other countries are optimistic and from talking to various friends in our industry and although there are a multitude of factors influencing our decisions we are moving forward in Relevant, Responsible and Result-driven direct marketing activities. This is good news.